Nomura Sees Attractive Valuation for Comcast

In a report published Monday, Nomura analyst Adam Ilkowitz reiterated a Buy rating and $60.00 price target on Comcast (NASDAQ: CMCSA).

In the report, Nomura noted, “Comcast shares have fallen (8.3%) since the Feb 13 announcement of its TWC acquisition, underperforming both the S&P 500 (+1.2%) and cable peers Cablevision and Charter. We believe this is unwarranted given a best-in-class Cable operation, an improving NBCU, and an opportunity for growth and synergies by turning around TWC. At 7.6x 2014E EBITDA, Comcast trades at the lower end of the 7.5–8.1x cable range despite having a higher-multiple media business in the mix. Assuming a media peer-average 11.0x for NBCU, our $60 target price implies 8x Cable, which we view as fair given sustainable mid-single-digit growth and increasing shareholder returns.”

Comcast closed on Friday at $50.64.